Last year, Alibaba Group CEO Daniel Zhang said the global expansion of Alibaba’s mostly Chinese operations was a top priority. This year, Zhang said the company will instead build up channels that allow international brands and merchants to sell online to Chinese consumers.
?China has been focusing on exporting for the past 20 years, but China should be focusing on importing,? said Jack Ma, Chairman of Alibaba at The Economic Club of New York in June 2015. ?I think China will become the largest importing country in the world in 20 years.?
Below are some main points of Alibaba’s global expansion during Jack Ma?s speech:
What?s the difference between Amazon and Alibaba?
Amazon is a platform to buy and sell. Alibaba helps small businesses buy and sell. There are 10 million businesses on the site that buy and sell everyday. Alibaba does not deliver packages, although there over 2 million delivery people helping deliver over 30 million packages every day. Alibaba does not own warehouses, but they manage thousands of warehouses for other small to medium sized delivery companies. Alibaba does not own inventory, but there are more than 350 million buyers and over 100 million shoppers coming to the site everyday.
Amazon is a shopping center. People buy what they see and get what they see. On Alibaba people look for a particular item, or don?t know what they look for but end up buying other different items and they love it because in China ecommerce is a lifestyle. Young people use ecommerce to exchange ideas to build up trust. It’s like when Chinese people go to Starbucks they are not trying to find out how great the coffee taste in Starbucks, instead it’s the lifestyle they want to experience in Starbucks.
Why is Alibaba focusing on globalization?
Alibaba wants to globalize the infrastructure of ecommerce because China?s ecommerce infrastructure is far from perfect.. ?So when the internet came, China made the infrastructure really work and sophisticated. In the U.S. – retailers are everywhere, so ecommerce in the U.S. would be considered a dessert (complimentary to the main business), but in China it has become a main course. ? said Jack Ma. Alibaba aims to globalize the infrastructure, the payment, the logistic centre, and the transparent platform to help businesses all over the world to sell anywhere and global consumers to buy anywhere.
Who are the target consumers?
China?s middle class is now the same size of the entire population of the United States, and Jack Ma predicts it would grow to half a billion in the next decade. China will need to import products to serve that middle class, particularly since domestic manufacturing has already strained the country?s resources and created problems with pollution.
What is Alibaba?s global expansion strategy in the U.S. and how does it benefit small businesses?
Alibaba?s global expansion strategy in the U.S. is to help as many U.S.-based entrepreneurs, small businesses, and companies of all sizes sell their goods to a growing Chinese consumer class.
In the past years, Alibaba has helped many U.S. farmers sell goods to China. For example, 160,000 tons of Seattle cherries from 80,000 farmers were sold to China with the help of Alibaba. Costco sold 600 tons of nuts from the first month of using Alibaba resulting in $6.5M in sales. Alibaba has also helped Alaska Seafood bring in 10 times their usual sales. On China?s Singles? Day, Alibaba made over $10 billion in sales. China need more U.S. products with 100 million eager Chinese consumers looking to buy things everyday.
The global strategy offers a new way for U.S.-based entrepreneurs and small business to access the enormous Chinese as well as global market, where there are huge demands for authentic American products. In line with this goal, Alibaba has launched Tmall international platform, a website dedicated to foreign businesses who want to sell their products in China. Additionally, Alibaba?s new wholesale platform enables U.S.-based as well as global entrepreneurs to sell their brands globally.
Now with the huge demand from Chinese consumers, it?s the perfect business opportunity for U.S.-based entrepreneurs and small businesses to start or expand their businesses in China by selling their brands or products on Chinese ecommerce platforms. Are you ready to claim your piece of the hungry Chinese market?